In the current times, a critical element to survival is addressing the challenges that the amended B - BBEE codes present to business. The amended B - BBEE codes makes it more difficult for companies, that have not adapted, to win new business. The thresholds have been significantly increased with the result that it now very difficult, unless you are at least 51% Black Owned, to obtain a high rating. One of the best and easiest ways to boost your rating is through skills development. In essence, the new codes demand a far greater investment in skills development with a particular emphasis on accredited training and learnerships.

Companies are now focusing on ways in which their training spend can earn them the highest number of B – BBEE points possible and, at the same time, make them more competitive. Companies with less than 10% black ownership will automatically have their ratings discounted by 1 level, which means that those wishing to obtain a higher rating will need to concentrate on all the other priority elements, of the B – BBEE Scorecard, and in particular skills development. Even if a company has good B - BBEE ownership credentials (51%+ black ownership) they will be required to score 40% in this element if they don’t want to be discounted a level, for example, your company will have to score at least 8 out of the 20 points available for skills development or you will be penalised

In the future, buyers will be cautious in only choosing suppliers whose BEE rating will help them strengthen their own procurement score. If your company depends on sales from government or corporates it will have little choice but to work on its BEE score. There are no short cuts. It will take you at least a year to complete the necessary steps, so don’t wait until the last minute to address this issue. Remember that the alternative of not improving your score could be costly.

Skills development is one of the easier elements to gain points on. Succeeding here will not only help with your score but will also give your business the skills it requires while lowering unemployment and therefor contributing to the economy of South Africa.

B – BBEE POINTS IN TERMS OF THE SKILLS DEVELOPMENT PRIORITY AREA:

You can earn:

• 8 points if you invest 6% of your payroll on the training of black people. This includes expenditure on training for unemployed black people.
• 4 points if you spend 0.3% of your total payroll on learning programmes for disabled, black employees.
• 4 pointsby participating in learnerships, apprenticeships and internships if 2.5% of your staff is enrolled on such programmes.
• 4 points if 2.5% of your company’s headcount are black unemployed learners.
• An additional 5 bonus points if all your unemployed learners will be gainfully employed at the end of the learnership.

INCENTIVES FOR COMPLYING WITH THE SKILLS DEVELOPMENT PRIORITY AREA:

By complying to the priority B – BBEE element of skills development, companies can qualify for available incentives such as Section 12H Tax rebates and Youth subsidies from SARS and Discretionary grants from the SETA’s (Sector Education and Training Authority).

CRITERIA FOR THE PAYMENT OF MANDATORY GRANTS:

The levy paying employer has to meet the following criteria:

Be registered with the Commissioner in terms of the Skills Development Levies Act (SDLA).

• Has paid the levies to the Commissioner as required by the SDLA.
• All levy payments are up to date at the time of the approval and for the reporting period.
• The WSP (inclusive of the Pivotal Plan) and ATR had been submitted by the required deadline.
• The WSP for the previous reporting period has been submitted and implemented according to the prescriptions for implementation by the particular SETA.
• Any employer who has a recognition agreement with a trade union or has any union in place will have to provide proof that the WSP and ATR have been subject to consultation with recognised trade unions and the WSP and ATR must be signed off by the labour representative appointed by the recognised trade union unless an explanation is provided.

The above will therefore require companies to plan training that will be implemented and the employer will have to ensure that all training meet the criteria set out by their SETA.

In addition to the aforementioned incentives, your company can benefit from the new B – BBEE Codes in the following ways:

You can now also claim for training costs of people that are not employed by your company.

• Skills development spending can be counted in two elements at the same time, i.e. it can be both part of supplier and enterprise development.
• Learnerships, apprenticeships and internships are great ways to boost your training spend, as you can count the salaries of the learners as a training expenditure.
• Learnerships for the disabled allows you to score in three elements at the same time – skills development, supplier development and enterprise development.